Essay on Whole Foods

Whole Foods is one of the biggest organic grocery chains in the world, which operates in the natural, specialty and  organic foods retail industry. Established by John Mackey in 1980, Whole Foods rapidly became one of world’s most known and successful foods grocery chains that took a leading position at the international global market. Nowadays, the company is considered to be one of the most socially responsible organizations in managing a competitive strategy over its major competitors.

Whole Foods’s main strategy is to provide the consumers with food of great quality, and to offer a wide range of different products that everyone may enjoy. Based on the above strategy, we can mention about Whole Foods’s five primary values: “providing only high-quality foods; satisfying and delighting customers; promoting team member excellence and happiness; creating wealth through profits and growth; caring about communities and the environment” (Ireland, Hoskisson, & Hitt, 2008, p. 98).

In addition, the company built its success on the following approaches that include: top quality products and goods, healthy and natural foods, motivated business strategies and excellent quality customer service. Whole Foods produces a wide variety of natural and organic products that include as follows: seafood, bread, meat and poultry, nutritional supplements, body care products, and many others. Whole Foods decided to produce an organic and environmentally-friendly product line named Whole Body in order to be more competitive and profitable at the market. Furthermore, the company sells different products under well-known private labels, including Whole Kids Organic, Authentic Food Artisan, 365 Organic Everyday Value and more.

To counter the five competitive forces and to achieve advantages over other firms in the industry, it is important to decide between three potentially successful basic strategic approaches – the scale of competition and focus on minimizing costs or differentiation:

• Cost leadership strategy;
• Differentiation strategy;
• Focus or strategic scope.

Each of the strategies aimed at obtaining certain competitive advantages, and in order to achieve them, the company needs to make a choice, that is, decide what particular type of competitive advantage it needs and to what extent the company will achieve them.

Now let us briefly describe each Porter’s generic competitive strategy.

Cost leadership strategy – the firm must achieve leadership by one or more ways:

1. Establishing production facilities of economically efficient scale;
2. Reducing costs on the basis of experience;
3. Tight control over production and overhead costs;
4. Avoiding small transactions with customers;
5. Obtaining special rights of access to sources of raw materials;
6. Minimizing costs in areas, such as research and development, maintenance, marketing, advertising and other marketing communications.

The second basic strategy – differentiation strategy offered by the company, i.e. creating such a product that would be perceived by consumers as unique and inimitable. In this case, the company, positioned in such a way, is rewarded with the buyer’s willingness to pay a high price for a particular product.

Product differentiation in this case may be in various forms (or combinations thereof):

1. Prestige design or brand;
2. Special technology;
3. Functionality;
4. Terms of customer service;
5. Dealer network;
6. Other parameters.

In return, focus or strategic scope is based on the selection of the narrow scope of competition within an industry. The company that has chosen this strategy chooses a particular segment or a group of segments and directs its activities exclusively to service this sector.

Proceeding from the above strategies, it is possible to conclude that the organization’s strategy can be classified according to the differentiation strategy. Supporting this point of view, Witcher and Chau (2010) stated that “Whole Foods Market’s strategy is focused on differentiation. Its products are unadulterated by artificial additives, sweeteners, colourings and preservatives, and the company aims to give an extraordinary customer service” (p. 168).

Talking about the company’s inputs, it is possible to mention about environment, resources, and history.  According to Nadler and Tushman (1980), their congruence model of organizational behavior “is based on how well components fit together – that is the congruence among components; the effectiveness of this model is based on the quality of these ‘fits’ or ‘congruence’” (p. 39).

Thus, the environmental dominant consists of all the entities that directly interact with the organization. They can include: competitors, customers, suppliers, governmental and regulatory bodies, etc.

Focusing our attention on Whole Foods Market’s competitors, it should be noted that some of them are: Kroger, Safeway, SuperValu, Fresh Market, Wal-Mart, Sam’s Club, Ingles Markets, and more. However, despite the numerous numbers of competitors, the company occupies a leading position at the international global market.

Customer satisfaction is essential to Whole Foods Market’s success. That is why Whole Foods’s customers are the most essential stakeholders in their business. Therefore, the company strives to satisfy and meet all the customers’ needs and requirements in a proper way.

The company creates a strong business relationship with its customers by demonstrating the basic beliefs, which include:

• Clients are the main motivation for the company’s work;
• The company and their clients are interdependent on each other;
• The company’s major goal is to satisfy its customers’ wants best it can;
• The company treats each client with courtesy and respect.

Besides, in order to delight its customers, the company constantly experiments and implements new innovative projects to increase its retail standards.

Whole Foods Market is notable for its system of decentralized buying. This means that the company does not have a professional supply chain. Management is carried out using an extensive administration, which creates partnerships with local suppliers. Each store has a golden opportunity to adapt its product and offer it to the local community. Despite the fact that each store has its autonomy, each product should comply with the company’s top quality standards.

The second company’s input is its resources. These include capital, technology, employees, and so on.

Human resources are the key factors in the company’s success. Whole Foods employees are responsible for their job duties and perform their tasks according to required qualifications and job performance standards. Whole Foods looks for skilled workers at various levels in the organization. It pays its specific attention to employees who believe in the company’s mission, want to join their team, and work for the prosperity of the organization.

The company’s technologies include the technical tools, which are utilized in the manufacturing of the product itself. Moreover, the company uses social networks, Internet, and various communication technologies required for the production of the product itself.

The third company’s input is its history. The way Whole Foods operates today is greatly influenced by the past events. After opening the first store in Austin, Texas, Whole Foods Market quickly began its expansion out of Austin.  Mainly the company is notable for its natural and organic foods that are healthy to the human’s organism. This fact made it well-known and in demand with the crowds all over the world.

All the above inputs are critical to Whole Foods in implementing its major strategy. Thus, the inputs at Whole Foods Market consisting of organizational environment factors, internal resource factors, and historical tradition factors are highly congruent with the company’s strategy. The company strives to implement all its strategies and adhere to high-quality standards.

All in all, it possible to conclude that Whole Foods deservedly occupies the leading positions at the international global market due to its successful strategies, as well as environmentally-friendly and healthy foods.